Ricardianoid Arguments

The defense of Lucas seems to be that he wasn’t making a Ricardian-equivalence argument, because Ricardian equivalence says nothing about the effect of changes in government spending. But that’s precisely
the point! He made an argument that was the kind of thing you use to argue that a temporary tax cut or transfer payment has no effect, and applied it wrongly to actual government purchases of goods and services.
So it was something that sounded like Ricardian equivalence but wasn’t; call it Ricardianoid. And it was, whatever you call it, just wrong.

Now Noah Smith tries to argue that Lucas was actually invoking Say’s Law rather than a Ricardianoid proposition. But as Brad says,
he clearly wasn’t; if you have a Say’s Law view of the world, you believe that monetary as well as fiscal policy cannot affect spending. And the whole business about taxes now or later wouldn’t
have been relevant if it was a Say’s Law argument.

But in any case the bottom line is that the great Lucas made a nonsense argument by any standard — and on the basis of that argument went on to accuse Christy of “shlock economics” and corruptly
inventing a reason to serve her political masters. And the fact that people are leaping in to defend Lucas here tells you something.